Welsh construction sector more resilient than elsewhere in UK

RICS Construction & Infrastructure Market Survey, Wales, Q3 2019.

The Welsh construction sector remained more resilient than elsewhere in the UK despite pressures linked to financial constraints, planning challenges, and Brexit uncertainty, according to figures from the Q3 RICS (Royal Institution of Chartered Surveyors) Construction & Infrastructure Market Survey.

18% more respondents in Wales reported an increase in construction workloads in Q3, up from a 14% net balance the previous quarter. Of all the UK regions, only Scotland recorded a higher net balance.

Relative to other sectors of the Welsh construction industry, workloads in public housing grew at the fastest pace, followed by infrastructure and other public works.

Meanwhile, workloads in the Welsh private housing sector grew in Q3 according to a net balance of +11% of respondents, whilst commercial and industrial activity was flat.

Looking to the year ahead, construction activity in Wales is expected to be most resilient in the private housing sector with 29% more Welsh surveyors anticipating activity to rise rather than fall. However, surveyors in Wales remain relatively cautious about the overall outlook, with a net balance of 10% expecting construction workloads to be higher next year.

Obstacles to growth cited by respondents in Q3 included access to finance, which continues to be amongst the biggest impediment to building activity in Wales (cited by 62% of respondents). Respondents pointed to planning and regulation as the biggest obstacle (cited by 70%). Anecdotally, Welsh respondents also continue to cite Brexit uncertainty as a limiting factor.

“House-building activity – both public and private – remains the key bright spot in the construction sector in terms of activity. Rising workloads are also evident in infrastructure and other public works, according to surveyors which is positive as we seek to create a more balanced and competitive economy for the long-term. Investment in industrial, logistics and commercial property also remains strong despite the uncertainty surrounding Brexit, which is most encouraging. Looking ahead, whilst respondents remain cautious about the outlook, this has the potential to materially improve if greater certainty can be achieved in the wider economy and the government authorises more spending in the next spending review.”